McInerney plc faces wind-up

THE BOARD of troubled housebuilder McInerney is proposing to wind up its listed parent company and says that no equity value remains for its shareholders.

The group’s Irish business is waiting for the Supreme Court to rule on a rescue plan put forward by examiner, Bill O’Riordan, while its British and Spanish businesses have been sold.

McInerney Holdings plc’s chairman, Ned Sullivan, has written to shareholders informing them that the stock exchange-listed company’s board is proposing to place it in voluntary liquidation.

“As there is no longer any remaining equity value for the existing shareholders, and following consultation with our financial and legal advisers, the only realistic option available to your board at this point is to propose a voluntary liquidation of the company,” the letter states.

The board plans to hold an extraordinary general meeting on Friday, July 29th, in Dublin to ask shareholders to vote on a resolution to place the company in voluntary liquidation.

Mr Sullivan’s letter says that the directors have exhausted all possible options to rescue the group, while at the same time trying to achieve returns for all stakeholders, including the shareholders.

The move will not affect the Supreme Court process. This relates only to the Irish subsidiaries, McInerney Homes and McInerney Contracting, which have been in examinership since last autumn.

They owe €113 million to a syndicate of banks – Anglo Irish, Bank of Ireland and Belgian-owned KBC. US private equity fund Oaktree Capital has offered €25 million in final settlement of this debt, and is committed to investing €48 million in the businesses.

Oaktree’s proposals form the backbone of Mr O’Riordan’s rescue plan, which the High Court refused to approve earlier this year on the grounds it was “unfairly prejudicial” to KBC’s interests.

The Supreme Court heard the appeal against this ruling in May, and the group is hopeful it will deliver its verdict before the end of the current term on July 29th.

If the court approves the plan, Oaktree will own the business and around 100 jobs will be saved.

If not, Nama will acquire the share of the debt due to Anglo and Bank of Ireland, while KBC will retain its portion – around 20 per cent.

Both the State agency and KBC will have the right to appoint receivers in that situation. All three banks opposed the examinership and instead proposed an 11- year receivership that would see them fund the building and sale of houses on McInerney sites.